Strange to listen to an interview that lasts for more than 2 minutes and is not hostile to Schiff.
Monday, October 21, 2013
Another Day, Another Dollar- Price/Volume Heat Map for Oct. 18 Trading/Week
The S&P 500 has pushed into new territory on the 'euphoria' following the three-month resolution to the debt-ceiling debate. More so, the market likely rallied on the supposition that the economic weakness that resulted from the government shutdown, which I have seen ball parked in the 30 basis point range, in conjunction with a growing likelihood that the Fed will not taper at any point this year, if not longer. I continue to think the S&P 500 will push into an area in the 1,776 level.
Although the market's value increased, the overall demand waned with most sectors posting demand dynamics less than 50%. This suggests to me that the breadth of the gains were weak overall.
Week Ending Oct. 18
For the latest ended week, the S&P gained well over 200 basis points. This is as all sectors gained in price with telecom and financials leading and industrials and utilities lagging, on a percentage change basis.
If you have followed the daily pieces, the following should come as no surprise. Overall demand on the week was very strong. Demand was strong in more than 70% across the market sectors.
Although the market's value increased, the overall demand waned with most sectors posting demand dynamics less than 50%. This suggests to me that the breadth of the gains were weak overall.
Week Ending Oct. 18
For the latest ended week, the S&P gained well over 200 basis points. This is as all sectors gained in price with telecom and financials leading and industrials and utilities lagging, on a percentage change basis.
If you have followed the daily pieces, the following should come as no surprise. Overall demand on the week was very strong. Demand was strong in more than 70% across the market sectors.
Friday, October 18, 2013
We Are In QE Forever -- Famed Economist
I have never heard of this economist, but he does provide some intriguing insights...... albeit he sounds more Austrian and I understand my assessment is biased.
The Ludwig Von Mises Legend
Via the Mises Institute. Yes, the video is a bit old but the content remains relevant.
Price/Volume Diffusion Index Turns Up But.....
Yes, as I stated earlier, I think the S&P 500 will move higher and trade to, at least the 1,776 level. Not only has this potential move been confirmed technically and via the demand dynamics on the upswing, but also by a turn up in the Price/Volume Diffusion Index... shown below
Price/Volume Diffusion Index
I had thought that the recent stall out in the measure suggested that it would turn lower. My thesis was blown out of the water with the increase in price on an expansion in total volume. All together, I think the market is going higher in the short-term.
However, all is not right in the country of Denmark. The summation index, not shown, is showing weakening momentum trends, as the slope of the summation index has turned down.
Slope of the Summation Index
This suggests to me that the underlying strength is weakening. Stay nimble.
Price/Volume Diffusion Index
I had thought that the recent stall out in the measure suggested that it would turn lower. My thesis was blown out of the water with the increase in price on an expansion in total volume. All together, I think the market is going higher in the short-term.
However, all is not right in the country of Denmark. The summation index, not shown, is showing weakening momentum trends, as the slope of the summation index has turned down.
Slope of the Summation Index
Debt Ceiling Not Over, Fed Could Increase QE -- For Pete's Sake
Kitco's Pete Hug discusses the implications of higher government debt (which ballooned by more than $300 billion yesterday), no chance of QE until at least March of 2014, and a lower dollar. The latter of which, by the way, that has broken the 52-week low.
Why Obamacare Will Make America Less Productive
So as marginal employees are pushed into part-time work and as labor demand is reduced on increased costs, the unemployment rate may continue to decrease with a reduction in the labor supply.
Via Economic Policy Blog and By Veronique de Rugy
Washington's shutdown is over and the debt ceiling has once again been raised, yet the long-term budgetary and economic outlook is no more certain that it was before Congress struck a deal.
Adding to the uncertainty is the implementation of President Obama's health care law, also known as Obamacare. Let's look specifically at the potential impact of Obamacare on the supply and demand of labor.
On the demand side, the health care law requires employers with more than 50 workers to provide health insurance to all full-time employees (defines a full-time job as 30 hours or more per week) or pay a $2,000 penalty per worker.
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In that sense, the law increases the cost of current and future employees. It also gives businesses an incentive to hire more part-time workers to avoid the costs of providing health insurance or paying the penalty for full-time employees.
There is increasing evidence that this is already happening. Employers ranging from companies such as Walmart and Forever 21 to community colleges in Virginia have already started increasing their share of part-time employees rather than full-time ones.
Obamacare’s tax increases will have a negative impact on labor’s supply side, as well. University of Chicago economist Casey Mulligan has done a significant amount of research on this issue.
In his August piece in the New York Times about health-care inflation and the arithmetic of labor taxes, he wrote:
“The Affordable Care Act also creates explicit taxes on employers, subsidies for layoffs and various implicit taxes on employees with many of the same economic characteristics as taxes on employers.”.
In addition to the tax, the law also provides more subsidies to low-income families, and adds “four significant, permanent, implicit unemployment assistance programs, plus various implicit subsidies for underemployment.”
In a National Bureau of Economic Research paper published in August, Mulligan calculated the combined effect of higher taxes and more generous subsidies.
He found that it will have an important depressing impact on American’s incentive to work, and hence, on our labor supply. In other words, Obamacare will contract the labor market.
Read the rest here.
Via Economic Policy Blog and By Veronique de Rugy
Washington's shutdown is over and the debt ceiling has once again been raised, yet the long-term budgetary and economic outlook is no more certain that it was before Congress struck a deal.
Adding to the uncertainty is the implementation of President Obama's health care law, also known as Obamacare. Let's look specifically at the potential impact of Obamacare on the supply and demand of labor.
On the demand side, the health care law requires employers with more than 50 workers to provide health insurance to all full-time employees (defines a full-time job as 30 hours or more per week) or pay a $2,000 penalty per worker.
Sign Up for the Politics Today newsletter!
In that sense, the law increases the cost of current and future employees. It also gives businesses an incentive to hire more part-time workers to avoid the costs of providing health insurance or paying the penalty for full-time employees.
There is increasing evidence that this is already happening. Employers ranging from companies such as Walmart and Forever 21 to community colleges in Virginia have already started increasing their share of part-time employees rather than full-time ones.
Obamacare’s tax increases will have a negative impact on labor’s supply side, as well. University of Chicago economist Casey Mulligan has done a significant amount of research on this issue.
In his August piece in the New York Times about health-care inflation and the arithmetic of labor taxes, he wrote:
“The Affordable Care Act also creates explicit taxes on employers, subsidies for layoffs and various implicit taxes on employees with many of the same economic characteristics as taxes on employers.”.
In addition to the tax, the law also provides more subsidies to low-income families, and adds “four significant, permanent, implicit unemployment assistance programs, plus various implicit subsidies for underemployment.”
In a National Bureau of Economic Research paper published in August, Mulligan calculated the combined effect of higher taxes and more generous subsidies.
He found that it will have an important depressing impact on American’s incentive to work, and hence, on our labor supply. In other words, Obamacare will contract the labor market.
Read the rest here.
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